We've been hearing about the decline of reading for so long now that it's amazing a contemporary teenager can even recognise a book, much less read one. The US (where I am) seems to be cycling through yet another "Johnny can't read" mini-panic, sparked by the release of a National Endowment for the Arts study, called To Read Or Not To Read, which chronicles in exhaustive statistical detail the waning of literary culture and its dire consequences for society. Newspapers dutifully editorialised about America's literacy crisis.

It's the sort of "our kids in peril" story - right up there with threats of MySpace predators - that plays well as a three-minute television newsbite or a three-paragraph op-ed piece. But if you actually read the report, what you find are some startling omissions - omissions that ultimately lead to a heavily distorted view of the Google generation and its prospects.

You need to read it

The NEA makes a convincing case that both kids and adults are reading fewer books. "Non-required" reading - ie, picking up a book for the fun of it - is down 7% since 1992 for all adults, and 12% for 18-24 year olds.

The subtitle of the NEA report - A Question Of National Consequence - would lead you believe this dramatic drop must have had done significant damage to our reading proficiencies as a society. And indeed, NEA chair Dana Gioia states boldly in his introduction: "The story the data tell is simple, consistent and alarming." But then the data turns out to be complex, inconsistent and not really that alarming at all. As Gioia puts it, in the very next sentence: "Although there has been measurable progress in recent years in reading ability at the elementary school level, all progress appears to halt as children enter their teenage years."

What was that again? There's measurable progress in two of the three age groups reviewed? Actually, it's more than just measurable: if you look at the charts, the single biggest change - either positive or negative - is the spike upwards in reading abilities among nine-year-olds, which jumped seven points from 1999.

But at least there must be an "alarming" drop in reading skills among those 17-year-olds to justify this big report. And there it is: the teenagers are down five points from 1988. But wait, this is all on a scale of 0-500. If you scored it on a standard 100-point exam scale, it's the equivalent of dropping a single point. Not exactly cause for national alarm.

And we're comparing two different generations. Today's teenagers are the nine-year-olds who didn't test all that well back in 1999 - presumably because they didn't develop a love of reading that would sustain them through the competing attractions of being a teenager in the digital age. But there's no reason to suspect that the current crop of nine-year-olds won't be much better at sustaining their interest in reading given their current performance.

Comparable non-events appear when you look at prose literacy levels in the adult population: in 1992, 43% of Americans read at an intermediate level; by 2003 the number was slightly higher at 44%. "Proficient" readers dropped slightly, from 15% to 13%. In other words, the distribution is basically unchanged - despite the vast influx of non-native English speakers into the US population during this period.

All of which raises an interesting question: if people are reading less, why haven't scores dropped more dramatically? The answer gets to the most significant sleight of hand of the NEA study: its studies are heavily biased towards words on a printed page.

Odds are that you are reading these words on a computer monitor. Are you not exercising the same cognitive muscles because these words are made out of pixels and not little splotches of ink? According to the NEA you're not, because in almost every study it cites, screen-based reading is excluded from the data. This is a preposterous omission, because of course the single most dramatic change in media habits over the past decade is the huge spike in internet activity.

Yes, we are reading in smaller bites on the screen, often switching back and forth between applications as we do it. A recent study by the British Library of onscreen research activities found that "new forms of 'reading' are emerging as users 'power browse' ... "

And of course we are writing more, and writing in public for strangers: novel readers may have declined by 10%, but the number of bloggers has gone from zero to 25 million. Simply excising screen-based reading from the study altogether is like doing a literacy survey circa 1500 and only counting the amount of time people spent reading scrolls.

All Gioia has to say about the dark matter of electronic reading is this: "Whatever the benefits of newer electronic media, they provide no measurable substitute for the intellectual and personal development initiated and sustained by frequent reading."

Technological literacy

The only reason the intellectual benefits are not measurable is that they haven't been measured yet. There have been almost no studies that have looked at the potential positive impact of electronic media. Certainly there is every reason to believe that technological literacy correlates strongly with professional success in the information age.

I challenge the NEA to track the economic status of obsessive novel readers and obsessive computer programmers over the next 10 years. Which group will have more professional success in this climate? Which group is more likely to found the next Google or Facebook? Which group is more likely to go from college into a job paying $80,000 (£40,600)?

But the unmeasured skills of the "digital natives" are not just about technological proficiency. One of the few groups that has looked at these issues is the Pew Research Centre, which found in a 2004 study of politics and media use: "Relying on the internet as a source of campaign information is strongly correlated with knowledge about the candidates and the campaign. This is more the case than for other types of media, even accounting for the fact that internet users generally are better educated and more interested politically. And among young people under 30, use of the internet to learn about the campaign has a greater impact on knowledge than does level of education."

In a piece for the New Yorker, Caleb Crain manages to write several thousand words about the fate of reading in the modern age with only a few passing references to the computer screen. Unlike the NEA, he at least acknowledges the potential benefits in one brief paragraph: "The internet, happily, does not so far seem to be antagonistic to literacy. Researchers recently gave Michigan children and teenagers home computers in exchange for permission to monitor their internet use. The study found that grades and reading scores rose with the amount of time spent online."

Screen shift

The problem with both arguments is that they're fundamentally rehashing the technological opposition of the television age, the kind of opposition that McLuhan wrote about so powerfully back in the 1960s: word versus image, text versus screen. But that long-term decline towards a pure society of image has been reversed by the rise of digital media. What separates the Google generation from postwar generations is the shift from largely image-based passive media to largely text-based interactive media.

We don't know exactly how that will play out in the long run, but thus far, when you look at the demographic patterns of the Google generation, there is not only no cause for alarm: in fact, there's genuine cause for celebration. The twentysomethings in the US - the ones who spent their childhood years engaged with computers and not zoning out in front of the TV - are the least violent, the most politically engaged and the most entrepreneurial since the dawn of the television era.

But if you listen to the NEA, we are perched on the edge of a general meltdown: "The general decline in reading is not merely a cultural issue, though it has enormous consequences for literature and the other arts. It is a serious national problem." A serious national problem with no apparent data to support it. Perhaps the scholars at the NEA should put down their novels and take some statistics classes?

· Steven Johnson is the author of Everything Bad Is Good For You: How Today's Popular Culture Is Actually Making Us Smarter and The Ghost Map, available from guardian.co.uk/bookshop

· This article was amended on Thursday February 14 2008. The chairman of the National Endowment for the Arts is Dana Gioia, not Giola as we had it in the article above. This has been corrected.